‘We have an economic plan and a freedom agenda’

‘We have an economic plan and a freedom agenda’

Rajeev Gowda

“We will not cut merit subsidies, we will not tax the middle class to run NYAY scheme,” Congress Rajya Sabha MP and convener of the party’s manifesto committee Rajeev Gowda tells DH’s S. Raghotham in an interview. Excerpts:

The main question so far has been, how will you fund the NYAY scheme? Where will the money for it come from unless you cut all the other subsidies? Rahul Gandhi said “it will come from the people who Modi gave money to.” That’s good rhetoric, but that’s not an answer.

We will not cut the various merit subsidies, and we will not tax the middle class. So, take those two red lines. We will find the resources in other ways. For example, we've talked about disinvestment from non-core, non-strategic PSUs. We've also talked about rationalising the revenues foregone – the huge amount of benefits that corporates get, right? We can rationalize that. If you think about it, just on the side, that was supposed to be part of the deal for reducing corporate taxes anyway under Arun Jaitley. He said, "I'm going to reduce taxes and I'm going to eliminate these other things". That's not actually happened. So, I think you know one can actually pull off something in that in that realm.

In any case, we believe that we will be launching it in phases. In the first year, it will be a slow roll-out. So, in the first year, you won't see that much of a fiscal impact, and I do expect that this will all result in consumption -- what we call remonetization of the economy -- and you know, an overall boost, especially in rural India, which is otherwise hurting. Then, because we are a growing economy, every year the proportion of GDP that will be allocated to this will be much smaller as we go forward. Alright? So that's the basic argument in terms of how we're going to fund NYAY.

In comparison, look at the numbers that the BJP is offering. If you look at their manifesto, they say they will spend Rs 25 lakh crore for farmers and Rs 100 lakh crore for infrastructure. Our entire NYAY programme costs Rs 3.6 lakh crore. Where is Rs 3.6 lakh crore and where is BJP's Rs 25 lakh crore a year (for farmers and infrastructure put together). So, I believe that we are very much more in the realm of reality, compared to the BJP.

From your manifesto, it looks like it's all give, give, give. What about wealth creation? You do talk about it being wealth and welfare, but how are you going to spur wealth creation?

See, for example, our president has been talking about MSMEs as the engines of growth and jobs. So, one big thrust of what we have focused on is that we say we let MSMEs go out there and and start, go register your business and then for three years, just follow minimum wage rule and don't break any environmental laws. We will not hassle you (with too much regulation). That's one.

The other thing we're going to do is fix GST, make it simpler, get rid of E-Way bills and other methods of harassment, prevent the government from forcing you to lock up your working capital in pre-payments. So, we will do many of these things which will be good for industry. In the process, I think we will be able to get some animal spirits revived once more. 

Then, there is another concept that we're trying to promote, called 'Mass Entrepreneurship'. The idea is that you know today, if you want to set up, say, some kind of media agency of your own, you may be able to get some money to invest into it, but then you may not know enough about how to go out there and set up and run that business fully. So, we're going to set up something called an Enterprise Support Agency that will fill in these gaps in the ecosystem and give you access to knowledge and insight and mentoring and networks and things like that. What my venture capitalist friend does for his investees, we want to do that on scale for lots of businesses. The tacit knowledge on running a business is there with some communities, but it's not there with everybody else, and we need to sort of find a way to help them. So, this is not just about a little bigger scale.

Mass entrepreunership is, say, you want to set up a bakery, a beauty parlour, a courier agency, whatever it is, -- these are not new, these are tried and proven business models, but you know there is scope for more of these as cities grow. So, we're going to try and reignite that fire so that people start believing in themselves to go out and set up businesses. With MSMEs, we are also going to recognise and reward them on the basis of numbers.

Then, we're going to launch an apprenticeship program. This is not give, give, give, but this is something to take from the industry. If you employ more than 100 people, you need to institute an apprenticeship program -- apprenticeship, not an internship, nine months, one year or something which is long enough for the person to be well-trained and if an opening comes up, you need to treat them as the first choice. We will try and include that in CSR category such that it becomes one more incentive for businesses to be able to go out there and find the resources to make it happen. We also want to invest in existing clusters, ensure that their infrastructure is better, their access to markets is better, etc. And so, there's a lot of rejigging that needs to be done and when we do that, wealth creation will pick up once again. That's what we're confident of. 

We are hoping also to see wealth creation in the agriculture sector. We want to give a fillip to farmer producer organizations, we want to invest very heavily in rural infrastructure -- cold storage, food processing facilities and things like that. Then, we're going to open up the markets. We want to get rid of the APMC Act, we want to create the ability for farmers to be able to sell wherever they want and we want to push exports. That's the other major thing. So, this is the broad thrust of the economic logic underlying our manifesto. We want to maintain fiscal prudence along with that. One of the ways to fix the NPA problem is to consolidate the banking sector into fewer, stronger, much better capitalised banks. We are going to do that. 

You are promising this three-year regulatory forbearance, but it can't be done, can it? After all, they will still need to comply with environmental laws, etc.  

So, that's what I mentioned earlier -- minimum wage rules and environmental laws have to be observed. We can't have a business start that will destroy the environment. But beyond that, the harassment that you get from, say, the inspector of factories and boilers, or whoever else shows up, you won't have those hassles. 

Is that happening now? Wasn't that supposed to have gone away with the 1991 reforms?

Much of it has, but there's still some interference -- the commercial tax fellows show up, etc. 

So, how are you going to completely dismantle that? Even Modi hasn't been able to do that. 

Modi has not even been interested in doing that. See, Modi, during his campaign, was basically all things to all people. So, if you wanted to see him as a liberaliser, he said "minimum government", you wanted him to be a bigot, he could play that, too. Whatever people wanted to project on him, he was willing to that. He was like the holograms he used of himself. I don't think he was ever interested or had a particular economic philosophy on these fronts. The economic philosophy is, how do the cronies help him, how does he return the favour to his cronies?

Look at what just happened recently. The Gujarat government and the Central Energy Commission have agreed to new terms for (Gautam) Adani to supply power at a much higher rate than what had been contracted. And the argument is, if they didn't agree, then there would be no power supply. This is the sort of game that these guys are playing.

Your manifesto also says we need to increase the share of manufacturing in GDP to 25%? How will you do it?

What we are saying is, we want to aggressively woo every Fortune 500 company and get them to set up a business in India. That’s a tangible goal. Second, we want to treat FDI and local capital on a level playing field, with as little restriction on FDI as possible, to attract much more capital into the economy…

The one big thing you can do to attract FDI big time is open up retail to FDI. Will you do that?

I’m saying we’re going to open the door to FDI across sectors. I’ll stop there.

You are saying ‘Make for the World’, but remember, when Modi came up with ‘Make in India’, Raghuram Rajan said that the time for an export-led growth model had passed.

True, the window for the China model of export-led growth has closed, but that doesn’t mean we cannot revive some of our big job-creating industries, like leather, textiles, etc – the labour-intensive ones.

How well has your manifesto percolated to the masses? 

What we're trying to do is to get different parts of the manifesto to different groups of people. The one part that we think really needs to go everywhere is the NYAY program. That has been converted to NYAY Patra and Rahul and Priyanka took that into Uttar Pradesh recently. So, we're trying to take that particular message -- that we have a program for the poorest of the poor. That is the one message from this manifesto that we would like to percolate. The rest of it is aimed at particular sections. 

For instance, there are a bunch of aspects in the manifesto for the liberal section -- what we call our 'freedom agenda'. If you look at LGBTQIA rights, if you look at the kinds of laws and regulations that we want to get rid of, that is the freedom agenda, exactly the kind of agenda that the BJP is trying to critique. 

We've taken a bold step here, because we said it's time to stick to our principles come what may. When you look at a situation like what is happening in Jammu and Kashmir today...you know during our time in government, we had practically healed the wounds that had been festering. Everything has been reversed under this government. They have this whole approach of J&K as a piece of real estate. They have contempt for one section of the population there and hostility towards them. Nothing these guys are doing will revive peace and harmony in that region. That's why we thought it's time we took up an approach that essentially says, we are in the business of healing and we care for our people and we will not let their human rights be trampled upon.

The same thinking in general applies on a variety of other issues -- such as when we say, no more criminal defamation. Or, when we say, no more sedition. Sedition is basically a charge of 'waging war against the State'. Is that the sense in which it is being used now? It is not. A man gets lynched, and the UP government goes and files a sedition charge against his family rather than against those who attacked him. This is the sort of craziness that's going on. If there is an instance of someone waging war against the State, there are other laws to take care of that -- there is the Defence of India Act, there is the Unlawful Activities Prevention Act, etc. We don't need a law that is outdated.

The one question you can be asked on everything that you say today is, why did you not do it in the long period when you were in government? 

So, the counter to that is, yes, I'm not saying that our record is complete on these issues. But we brought in the Right to Information, the Lokpal Act, and a whole bunch of changes in terms of strengthening transparency, strengthening institutions and accountability. We did quite a bit. But it is a journey. But what have these guys (the Modi government) done? They have tried to sabotage every single one of these initiatives. 

Every session of parliament, the amendments that you file lapse. So, every session, I filed my amendments to the Whistle-blower Protection Act because the Modi government was trying to weaken it. Basically, they are saying, if you want to blow the whistle, you first have to obtain that information through an RTI application. In other words, they want you to first alert the corrupt that you are going to blow the whistle on them. Such is the sort of nonsense that is being attempted.

Similarly, they have weakened the Prevention of Corruption Act. They didn't appoint the Lokpal until, you know, one minute before their term ended, if you know what I mean. So that's how they win. They misuse the institutions, CBI, ED, everything, and then Modi says he is the 'king' of anti-corruption. But where is the discourse on these issues? Who's paying attention to them? 

Do you really want to come to power at this stage? In 2014, Modi came in at the cusp of economic recovery and things worked out well for him as oil prices collapsed, etc. But if you come in now, you’ll be walking into a jobs and industrial crisis, and the monsoon forecast is not good.

We will deal with it, no problem. On the industrial side, there are two aspects to that. One is to do with the credit system -- the whole banking mess. These guys didn't respond to it fast enough because they were the busy pointing fingers, instead of resolving the issue. In the process, valuable years have been lost and companies are in deep distress. And the government did not even reach out and help them. So, what we will have to do is pay much more attention to recapitalizing the banks as well as to somehow reviving those animal spirits. GST and its implementation are part of that. You will see things turn around when we stabilise the GST regime. 

Now, you are appearing contradictory. On the one hand, you say the Modi government did not help industry; on the other, you say they are too pro-business. 

No, no, no. They have not been pro-market or pro-business. Our charge is that they have been pro-crony capitalists. There's a huge difference. They have been pro a select group of businessmen. Anil Ambani and Gautam Adani are the ones in the limelight, but there are others. And there is enough evidence for that. It's just that these are not being probed. 

But, for all the trouble the industry is in, corporates still seem to be comfortable with Modi coming back, while Rahul Gandhi seems to have an image problem with corporate India

We are not against corporate India…

But you have not been able to convince them of that…

If you look at the emphasis on wealth creation in the manifesto, we clearly articulate that we will work with the private industry. The ‘suit-boot ki sarkar’ jibe was not aimed at the private sector as a whole, it was aimed at crony capitalism.

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